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Bird Cage Economics


The First Five-Year Plan, 1953-1957, was drafted under the direction of the Central Committee of the Communist Party of China (CPC) presided over by Premier Zhou Enlai and the First Vice Premier Chen Yun (Photo on the left).

It took two year that the first "Five-Year Plan" could be worked out in 1955 by a group of 8 people led by Vice Premier Chen Yun. The Plan was first released in June before the 2nd Session of the first Parliament and then passed on July 30 1955 in the session [1]. 

The key tasks highlighted in the Plan were: to concentrate efforts on the construction of 694 large and medium-sized industrial projects, including 156 with the aid of the Soviet Union, so as to lay that the primary foundations for China’s socialist industrialization; to develop agricultural producers’ cooperatives to help in the socialist transformation of the agriculture and handicraft industries; to put capitalist industry and commerce on the track of state capitalism so as to facilitate the socialist transformation of private industry and commerce [2].

The metaphor of bird and bird cage in the economics context has been introduced first time in the Chen's speech  to explain the  importance of the government planning and guidance to the national economics activities to this parliamentary session. Chen has been considered as the God father of the "Bird Cage Economics". Also for that reason, Chen was labeled as the rightest government leader by Chairman Mao since the birdcage economics has always been accused to constraint the fast growth of the socialist economy in China, especially Great Leap Forward from 1958 to 1961. Chen had token sick leave from his office shortly before Lushan Conference in July/August 1959. 

What is "Bird Cage Economics"? The God Father Explained [3]:

At December 2 1982, Chen Yun attended the Fifth National People's Congress at its fifth meeting, with some representatives of the Shanghai delegation held discussions, explained and further elaborated “Bird Cage Economics”. 

    Chen's original words are as the following:

    Since Party’s Third Plenary Session of the 11th Central Committee (Dec. 18 ~ 22 1978 Beijing), we implement the policy of revitalizing our economy significantly. Department stores are with very many things, "Seller's market" is becoming a "buyer's market". People have money in hand, best buy, not a bad buy. Such a good situation could not be seen since a long time. The future to continue to implement the policy of revitalizing our economy, Continue to play the role of market regulation.

    However, we have to prevent, in the revival of the economy, emerging from the tendency of national plans. Enlivening the economy are in the planning under the guidance of enliven, not to leave the program guide and enliven.

    Of course, "Cage" size should be appropriate, Much on how the. Economic activity is not necessarily restricted to a province, a region, under the guidance of the national plan can also be inter-provincial cross-regional, and even not necessarily limited to domestic, but also can cross-transcontinental. In addition, the "cage" itself should be regularly adjusted, such as five-year plan to be amended. But in any case, must have a "cage." In other words, the revival of the economy, market regulation, these plans can only be within the scope of permission to play a role, can not be divorced from the guidance of open plan.

The Real God Father of this Metaphor [4]

According to Chen Yun, the real god father of this metaphor should be general Huang Kecheng. Here is general Huang's short resume since 1949:

 Time  Title
 May 1949 to January 1952  Provincial Communist Party Secretary for Hunan Province
 January 1952 to 1959  Deputy director of chief staff and director of general logistics, deputy minister of national defense, secretary general of CMC (Central Military Commission ) and director of chief staff of PLA.

General Huang was made a senior general (General of Army) in 1955.
General Huang was the head of PLA General Staff Headquarters from 1958–1959.

In  1959 Lushan Conference, general Huang was denounced as a member of "Anti-Party group" along with Peng Dehuai, because he criticized the "Great Leap Forward" and "People's Commune". He was deprived of all positions and was under investigation for long time. He was later persecuted again during Cultural Revolution. He re-emerged in 1977 and was appointed as advisor to the Central Military Commission, and executive secretary of Central Commission for Discipline Inspection.